Segra Engages Canaccord Genuity Corp. for $10 Million Capital Raise Ahead of Going Public, Purchases 20-acre Property for Expansion
VANCOUVER, British Columbia, Oct. 10, 2018 (GLOBE NEWSWIRE) — Segra International Corp. (“Segra” or the “Company”), a cannabis biotechnology company, is pleased to announce that it has entered into an agreement with Canaccord Genuity Corp. (“Canaccord”), whereby Canaccord will act as lead agent and assist the Company in selling, on a commercially reasonable efforts private placement basis, up to 9,090,909 subscription receipts (the “Subscription Receipts”) at a price of C$1.10 per Subscription Receipt (the “Issue Price”) to raise aggregate gross proceeds of up to $10,000,000 (the “Offering”). The Offering will be completed prior to the close of the proposed acquisition by Chichi Financial Inc. (“Chichi”) that was previously announced on September 13th, 2018 and filed on SEDAR by Chichi (“Chichi Financial Inc. to Acquire Segra International Corp.”).
The Offering follows the Company’s recent announcement of the successful close of an oversubscribed private placement offering of units for aggregate gross proceeds of approximately $7.2 million that has been applied, in part, toward the purchase of a 20-acre property in the Greater Vancouver Area.
We are proud to see Segra’s industry-leading biotechnology resonating not just with cultivators, but the financial community as well. Our company has experienced tremendous growth in 2018, and now has the necessary resources and team in place to effectively scale our micropropagation services for mass production.
Segra President and CEO Todd McMurray
We hope to see that same growth expressed in shareholder value once Segra becomes a public company.
SUBSCRIPTION RECEIPT FINANCING
The Subscription Receipts shall be deemed to be automatically exercised into one unit of the Company (a “Unit”) upon satisfaction of the escrow release conditions, and without further action on the part of the holder. Each Unit shall comprise one common share of the Company (a “Common Share”) and one half of one common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant will be exercisable into one Common Share at a price of C$1.50 per Warrant for a period of 24 months from the date the escrow conditions are satisfied and is subject to a 30-day forced conversion if the daily volume weighted average price of the Company’s common shares is greater than C$2.00 per common share for the preceding 10 consecutive trading days.
Prior to the closing of the Offering (the “Closing Date”), Canaccord will have the option to increase the size of the Offering by up to C$5,000,000 on the same terms as described above (the “Agent’s Option”).
The Company will pay cash commissions to Canaccord equal to 7.0% of aggregate gross proceeds of the Offering. Canaccord will also receive Agent’s warrants exercisable for a period of 24 months from the Closing Date to acquire that number of Units which is equal to 7.0% of the number of Subscription Receipts sold under the Offering (including on any exercise of the Agent’s Option), at an exercise price that is equal to the Issue Price.
The net proceeds of the Offering are planned to be used for the construction of the Company’s micropropagation facilities and general working capital.
On September 17th, the Company completed the purchase of a 20-acre property located in the Greater Vancouver Area that is 40 minutes from Vancouver International Airport. This property will serve as Segra’s new corporate headquarters and micropropagation production facilities. Retrofitting of the property’s existing structures has already begun, with construction of two additional proposed micropropagation facilities on the property to follow. Combined, the two proposed micropropagation facilities are designed to provide more than 65,000 sq. ft. of space for cannabis tissue culture plantlet production. When fully constructed, the Company’s micropropagation facilities are projected to reach their designed capacity of 80,000,000 plantlets per year by 2024.
About Segra International
Segra is a biotechnology company that specializes in plant micropropagation and molecular genomics. The Company is developing industrial-scale cannabis micropropagation laboratories to produce healthy, robust plantlets for licensed producers globally, and has assembled a world-class team of specialists in the fields of plant tissue culture, agronomy, molecular genetics, regulatory compliance, and corporate finance. Segra’s technology empowers its clients to improve product quality, rapidly expand operations, decrease liabilities associated with pests and diseases, and increase profits. Segra currently has four large-scale Canadian licenced producers as clients, including HEXO Corp., Agripharm Corp., and The Supreme Cannabis Company, Inc.
The Segra team includes Dr. Sma Zobayed, Ph.D., Segra’s Director of Micropropagation. Dr. Zobayed is a world-renowned micropropagation specialist who has successfully micropropagated over 500 species of plants, including cannabis. Dr. Zobayed has successfully developed a protocol for true-to-type cannabis micropropagation.
Segra’s Genomics and Molecular Biology lab is led by Dr. John Brunstein, Ph.D. Dr. Brunstein and his team have developed proprietary methods for cannabis cultivar DNA “fingerprinting” and molecular-based plant pathogen detection. These efforts will underly Segra’s unique ability to confirm strain identities and a lack of pathogens on juvenile plantlets destined for cultivation facilities. These advanced quality assurance measures give clients peace of mind and showcase Segra’s global leadership in cannabis genomics. Segra is actively employing these proprietary genomics technologies to build a comprehensive strain reference library to become the global standard for cannabis cultivar identification. R&D within the lab will also support the development of marker-assisted selection techniques to enable advanced breeding programs and ultimately the creation of high value proprietary cannabis cultivars for medical and recreational cannabis markets.